S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    979
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                (PREFILED)
 
                              January 8, 2025
                                ___________
 
 Introduced by M. of A. LUNSFORD, WEPRIN -- read once and referred to the
   Committee on Insurance
 
 AN  ACT to amend the insurance law, in relation to contractual liability
   insurance policies
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph 1 of subsection (c) of section 7903 of the insur-
 ance  law,  as amended by chapter 578 of the laws of 2000, is amended to
 read as follows:
   (1) insure the performance of all its obligations  under  all  service
 contracts  pursuant  to  [a]  ONE OR MORE service contract reimbursement
 insurance [policy] POLICIES issued by [an insurer] ONE OR MORE  INSURERS
 authorized  to  issue  service  contract reimbursement insurance in this
 state or procured by an excess line licensee  pursuant  to  section  two
 thousand  one  hundred  eighteen of this chapter.  EACH SERVICE CONTRACT
 REIMBURSEMENT INSURANCE POLICY SHALL OBLIGATE THE  INSURER  THAT  ISSUED
 SUCH  POLICY TO EITHER DISCHARGE THE OBLIGATIONS AND LIABILITIES OF SUCH
 PROVIDER UNDER THE TERMS OF THE SERVICE CONTRACTS ISSUED BY SUCH PROVID-
 ER, INCLUDING THE RETURN OF UNEARNED PROVIDER FEES UPON ANY  TERMINATION
 OR CANCELLATION OF SERVICE CONTRACTS, IN THE EVENT OF NON-PERFORMANCE OF
 ANY  SUCH  OBLIGATIONS  OR LIABILITIES BY SUCH PROVIDER OR INDEMNIFY THE
 PROVIDER FOR LOSSES SUSTAINED BY  REASON  OF  THE  PERFORMANCE  OF  SUCH
 PROVIDER'S  OBLIGATIONS  UNDER SERVICE CONTRACTS ISSUED PURSUANT TO THIS
 ARTICLE. In the event the  provider  fails  to  insure  its  obligations
 pursuant  to  this  paragraph  or in the event that such insurance shall
 lapse or be terminated, the provider shall comply with either  paragraph
 two  or three of this subsection within forty-five days of the insurance
 lapse or termination;
   § 2. Subsection (b) of section 7905 of the insurance law, as added  by
 chapter 614 of the laws of 1997, is amended to read as follows:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD01514-01-5
 A. 979                              2
 
   (b)  Service  contracts insured under [a] ONE OR MORE service contract
 reimbursement insurance [policy] POLICIES pursuant to [paragarph]  PARA-
 GRAPH one of subsection (c) of section seven thousand nine hundred three
 of this article shall contain a statement in substantially the following
 form:    "Obligations  of  the  provider under this service contract are
 insured under a service contract reimbursement insurance policy. If  the
 provider  fails  to  pay or provide service on a claim within sixty days
 after proof of loss has been filed, the contract holder is  entitled  to
 make  a  claim  directly  against the insurer under the service contract
 reimbursement insurance policy." The service contract shall  also  state
 the  name  and  address  and a toll-free telephone number of the insurer
 under [the] EACH related service contract reimbursement insurance  poli-
 cy.
   § 3. This act shall take effect immediately.